Category: forex

Copy Trading And What It Is All About

The financial markets are becoming more accessible with online trading platforms and top brokers offering their services, so it is not surprising to see new investors taking advantage of this opportunity to explore the available instruments. There are more forex and stock traders today than ever before, and this is a good sign of a growing investment landscape.

Entering the now open financial markets, however, is not as easy as it seems. You still have to know your way around the traded instruments and the market as a whole. More importantly, you need to enter the market with a clear plan in mind. There are a lot of things to understand about the financial markets before you can make successful trades.

Many new traders turn to copy trading – and the broader social trading networks in general – for help. You too can learn about the financial markets while copying the trades of other, more experienced investors. But is copy trading a good idea?

Learn from the Best

Copy trading allows you to copy the trades of top investors on the market, but it doesn’t stop there. You still maintain complete control over the trades you make, including when it comes to deciding which investors you want to copy and how each trade is adjusted to your portfolio.

This level of control makes copy trading perfect for helping you learn about the financial markets you are entering. Rather than reading articles and relying on other resources, you can learn directly from top investors while benefiting from their trades at the same time.

Copy trading also lets you be a part of the market in real-time. You can apply the same technical indicators as the ones used by top investors, follow fundamentals from the same sources, and learn about the trades being made based on analysis and the usual decision-making process.

Allows You to Invest with Limited Knowledge

One of the biggest advantages of copy trading for beginners is that it allows new traders to start investing even if they have limited knowledge of trading and how the markets work. If you’re new to trading, it may be difficult to understand the challenges and pitfalls you should avoid and understand market behaviour.

People who first start trading currency pairs might be overly cautious at first, in order to not make mistakes. This makes the whole learning process much lengthier and will slow down your progression. But with copy trading, you’ll basically have a seasoned trader walking you through trades and showing you exactly which moves you should make. This will allow you to start making profits much faster than you would otherwise.

Saves Time

People are often unaware of how much time it takes to devise a trading strategy, and how time-consuming market analysis can be. Fundamental and technical analysis will most likely dominate your time if you’re doing everything on your own, especially if you’re not familiar with in-depth analysis in the first place. But with copy trading, all the hard work will already be done for you, and you can significantly reduce, or even completely bypass analysis altogether.

More Options to Choose From

Today’s copy trading services also allow you to tap into the same vast array of instruments that you can trade on the open market. Regardless of the CFDs and foreign currency pairs you are interested in, you can always find investors whose trades you want to follow.

This also gives you more flexibility in terms of shaping your portfolio. While you learn about the markets, your portfolio will continue to grow, and you stand a chance of banking profits along the way. There is no better way to learn than while profiting from real trades!

On top of that, you also have different platforms to use. ZuluTrade, for example, focuses more on their copy-trading features and signals. EToro, on the other hand, offers features related to both copy trading and the broader scope of social trading. The options are indeed endless.

Easier to Get Started

Copy trading doesn’t just make entering the financial markets easier. Getting started with your own copy trading account is also very easy to do, especially now that you have sites such as InvestinGoal helping you every step of the way. Via InvestinGoal, you can find reviews of popular copy trading services and platforms. These reviews help you choose the platform that suits your specific needs best. There are tips and tricks for beginners and even more resources to use as you learn about the market.

You even have news and social trading blogs to utilize as you venture further into the financial markets. With so many resources available, becoming a successful online trader – and starting that journey using copy trading as your weapon of choice – is easy.

Better Diversification

The added control you now have when copy trading helps you eliminate some of the issues associated with copy trading in the first place. Rather than taking the passenger seat and hoping for the best, you now have the ability to go deep into the trading strategy and find tactics that work for you.

In terms of diversifying your investment portfolio, for example, you are no longer limited to following one investor at a time. This means you can enter multiple markets, learn about them simultaneously, and copy the trades of top investors in each market.

The same can be said for risk management. In the old days, copy trading was often associated with a lack of risk management. This is due to many new investors taking copy trading as a way to make money quickly, which it isn’t. The more you are involved in managing your portfolio’s risks, the more profitable you will be in the long run.

Is it a Good Idea?

Is Copy Trading a good idea. We would have to say yes, read our opinion

Copy trading is a fantastic way to enter the market when you have little to no experience. That said, it is something that needs to be approached with learning in mind. Copy trading is how you learn from the best investors and be a great investor yourself, all while making money in the process.

Back in 2008 when Bitcoin was first conceived and began making its entry into the world of currency, there was a great deal of speculation as to whether or not this digital currency could (or would!) take the power of finances away from central banks around the world that have always held the keys to wealth. Over the past 8 years Bitcoins have surged in value from their humble beginnings at a value of $0.01 per coin to over $1200 per coin in 2013 and then back down again to just about half that value where they are currently valued at. Even though this currency is highly speculative, there are those who question whether their slow dominance of the Internet is a good thing – or not. Here are some thoughts on the issue.

Difficult to Use without Being Valued against other Bitcoins

As a peer to peer currency that is really valued by supply and demand, it should also be realized that there are only so many Bitcoins that will ever be made. The supply is finite, which to some, gives them value because of the old ‘supply and demand’ rule of finance. When it comes to wagering on online games such as poker, it becomes difficult to use them as a currency because it is difficult to break them down into smaller units that can be used as a wager and also, hard for ultimate values to be assessed as the value is even more volatile than many of the leading currencies on the market. It is far easier to use a major currency against another major currency than it is a digital currency against a major currency. In short, they are not yet fully understood by the masses and computations are highly complex. Too complex for the average financial transaction online.

The #1 Concern – Digital Anything Is Open to Hackers

Then there is the concern that since Bitcoins are a digital currency, hackers can literally take over a person’s supply with no one being the wiser as they can also create bogus Bitcoins that may be passed as authentic. The current level of online security appears to be inadequate to keep up with the type of security needed for digital currency so the slow dominance of the internet in this regard is actually a good thing. The longer it takes for this particular currency to gain in popularity and use, the longer cyber security teams will have to find ways to secure sites that accept Bitcoin payment.

In the end, the faster anything at all gains dominance over a market, the quicker it can come tumbling down. When people like online gamers are wagering bets, the money they are playing with needs to have real value. There is nothing ‘tangible’ about an online game as there would be such things as ordering articles from an online merchant and with the hopes of winning, that money being wagered becomes all the more important. It’s just that – a wager, a bet. With nothing to say that other digital currencies won’t hit the market, lowering its value and no sure way to protect against hackers at this time, slow dominance is indeed a very good thing.

Back in 2008 when Bitcoin was first conceived and began making its entry into the world of currency, there was a great deal of speculation as to whether or not this digital currency could (or would!) take the power of finances away from central banks around the world that have always held the keys to wealth. Over the past 8 years Bitcoins have surged in value from their humble beginnings at a value of $0.01 per coin to over $1200 per coin in 2013 and then back down again to just about half that value where they are currently valued at. Even though this currency is highly speculative, there are those who question whether their slow dominance of the Internet is a good thing – or not. Here are some thoughts on the issue.

Difficult to Use without Being Valued against other Bitcoins

As a peer to peer currency that is really valued by supply and demand, it should also be realized that there are only so many Bitcoins that will ever be made. The supply is finite, which to some, gives them value because of the old ‘supply and demand’ rule of finance. When it comes to wagering on online games such as poker, it becomes difficult to use them as a currency because it is difficult to break them down into smaller units that can be used as a wager and also, hard for ultimate values to be assessed as the value is even more volatile than many of the leading currencies on the market. It is far easier to use a major currency against another major currency than it is a digital currency against a major currency. In short, they are not yet fully understood by the masses and computations are highly complex. Too complex for the average financial transaction online.

The #1 Concern – Digital Anything Is Open to Hackers

Then there is the concern that since Bitcoins are a digital currency, hackers can literally take over a person’s supply with no one being the wiser as they can also create bogus Bitcoins that may be passed as authentic. The current level of online security appears to be inadequate to keep up with the type of security needed for digital currency so the slow dominance of the internet in this regard is actually a good thing. The longer it takes for this particular currency to gain in popularity and use, the longer cyber security teams will have to find ways to secure sites that accept Bitcoin payment.

In the end, the faster anything at all gains dominance over a market, the quicker it can come tumbling down. When people like online gamers are wagering bets, the money they are playing with needs to have real value. There is nothing ‘tangible’ about an online game as there would be such things as ordering articles from an online merchant and with the hopes of winning, that money being wagered becomes all the more important. It’s just that – a wager, a bet. With nothing to say that other digital currencies won’t hit the market, lowering its value and no sure way to protect against hackers at this time, slow dominance is indeed a very good thing.

Online trading is widely seen as an appealing way for anyone to make money, by applying simple financial acumen and a basic knowledge of global economics and politics to the movements of international markets. With a computer and a reliable internet connection, you can trade from almost anywhere, whenever the markets are open. Some online platforms, such as UFX.com, even offer the opportunity to trade when they are closed through After-Hours Trading, or AHT. This creates the potential for larger profits, since there are fewer traders operating, meaning that prices can be far more ‘volatile,’ swinging more rapidly and by larger amounts.

Making significant profits from trading over the long-term does, however, demand a fair amount of effort, a cool head and the ability to learn quickly from your mistakes. There are a few basic rules that you need to follow in order to have a better chance of success, irrespective of your objectives, trading strategy and time frame.

The first rule is to consider the kind of trading style you want to adopt. Are you ready to spend a lot of time in front of your computer? Are you able to stay focused for long periods? Do you cope well with stress?

If your answer to each of these questions is ‘yes’, then scalping or day trading might be the trading style for you. Scalping involves making many trades, each within the space of a minute or so, with the aim of taking advantage of small movements in the markets. It’s particularly effective when an asset isn’t showing a significant medium-term trend in either direction, and is trading within a relatively narrow range.

If you don’t plan on spending hours monitoring the markets, then you may be better off adopting a swing trading strategy, where positions are often held for periods lasting between one day and several weeks. Traders with solid knowledge of specific assets and the factors which can affect their value – what’s known as “fundamental analysis” – often prefer this approach.

Long-Term Position Traders

A “position trader,” on the other hand, makes long-term trades, lasting for months or even years. An understanding of macroeconomics, global politics and the dynamics of emerging industries can make this a winning strategy for traders with a great deal of patience. The main advantage is that the rewards can be immense, if, for example, you predict a surge in demand for a certain commodity that will become a key component of a new product with worldwide appeal.

Once you’ve thought about the trading style you plan to adopt and have studied how the markets work, it’s important to apply sound money management principles to minimise any losses. One way to do this is to apply ‘stop losses’ to your trades, meaning that a position is automatically closed if its price moves beyond a pre-set limit. You can also use personal rules, such as never risking more than 2% of your total capital on a single position.

With the right plan of attack, online trading can be both highly profitable and enjoyable. Make sure you’re fully prepared for the experience and you’ll soon see why more and more people are turning their focus towards this additional income stream.

Trading on the financial market can be a fascinating activity and a great way of making some money. For those with the time, commitment and knowledge, it can even become a primary method of income, netting sizeable rewards. And even if you can only commit a limited amount of time to the market, you can still provide yourself with a nest egg for your retirement.

But while the opportunities are almost limitless, the risks are also very real. Starting to trade and invest in stocks without any knowledge or preparation is a sure way to lose everything. Nevertheless, there are straightforward ways of preparing yourself to take on the market that will give you a good chance of coming out a winner.

Study the market

You can start simply by following the market. Yahoo and Google both offer finance coverage – these are great places for beginners to study how the market works. As you grow more confident with the terminology, you can move on to the Financial Times or the Wall Street Journal. That way you’ll learn to spot trends, read analyses and pick up on economic concepts and jargon. There are many sources, both online and off, for useful articles.

Follow the greats

When you have the time, you should also consider reading a few of the many books on the subject of investment and stock trading. As a general rule, avoid the more sensational volumes that promise to make you a millionaire overnight. Look out for the major names in the field, such as Warren Buffett or Benjamin Graham. Many of the strategies applied sixty years ago are still valid today.

Take a course

If you’re really serious about getting involved with investing and trading on the financial market, then it’s a good idea to enrol on a professional course to learn the basics. The foreign exchange market, or forex market, is the world’s largest financial market and is open 24 hours a day, with international currencies constantly traded against each other. Forex trading courses are available that will show you how to make money on this market, whether it’s going up or down. Financial opportunities are always available if you know how to seize them. The risks are minimal if you know how to protect yourself, and trading for just an hour a day can be enough to earn you a sizeable tax-free secondary income.

Open an account

The next step is to open an account with a reputable online broker. You might want to find one that offers virtual trading as well, so that you can practise without taking any risks, until you get the hang of it. Use online forums to ask questions and pick up advice, and better still, get yourself a mentor who has experience of stock market trading. This is a tried and tested way of progressing for all successful investors.

Most importantly, establish your financial goals and how much you can afford to invest before you start. Generally, it’s best to start small and stick to one simple strategy. Treat any winnings as a bonus while you’re learning the ropes, and have fun!

Financial markets can be found in almost every nation in the world. Despite some being very small with only a couple of participants others, such as the New York Stock Exchange and the Forex markets, trade trillions a day. Some of these markets have been open to private investors since they began whilst others decided to maintain the exclusive domain of major international banks and other financial professionals up until the end of the 20th Century.

When it comes to market trading, a financial market is a broad term used to describe a market place where both buyers and sellers get involved in trading assets including equities, bonds, currencies and derivatives and can be recognised by their transparent pricing, basic regulations on trading, costs and feeds as well as their own market forces that determine the prices of securities that trade. In recent years, many of these different financial markets have been affected by changes in technology which is evolving more and more every day.

Capital Markets

A capital market is one where individuals and institutions trade financial securities. Each country has their own capital markets which can vary in size and growth, capital markets in Africa may be different from those in Europe or America. Often, organizations and institutions in both the public and private sector sell securities on the capital markets in an attempt to raise funds.

No matter what, governments and corporations require capital funds to finance their operations in order to pursue their own long term investments. To be able to do this, a company must raise money through the sale of bonds and stocks under the company’s name to be sold and bought in the capital markets.

Stock markets are one of the most important factors of a markets economy as they give companies who have access to the capital and investors the opportunity to gain ownership within the company and identify potential gains based on future performance. Here, investors can buy and sell shares in stock markets between publicly traded companies. Usually the market is divided between the primary and secondary market. Whilst the primary market is the first place where new issues are offered, the secondary market is home to any subsequent trading. The stock market can be volatile at times, particularly when there is political instability within a country, meaning some investors are beginning to worry that there is a calm before the storm on Wall Street this year.

If an investor loans money to a corporate or governmental entity, this is called a bond. It involves borrowing an amount of money for an agreed period time at a secured interest rate. They are used by a number of companies, foreign governments, states and municipalities to fund an array of activities and projects. Bonds can also be bought and sold by investors around the world on credit markets.

Money Market

The money market is just one asset to the financial market where financial instruments that tend to have high liquidity and short maturities are traded between banks or other financial institutions. To put it simply, the money market is used to borrow and lend money for up to just under a year. Whilst investors are prepared to take more risk and tolerance when it comes to investing in capital markets, money markets are a great alternative to hold funds that ae required in a shorter period of time.

Cash or Spot Market

In this highly complex yet vulnerable market, it is a rule that items sold for cash and contracts that are either bought or sold on the market are delivered and implement immediately. Compared to other markets, the cash or “Spot” market prices are established in cash at the current market price whereas other trades are usually settled at forward prices, meaning that those who decide to invest can either be rewarded with a big gain or suffer from a large loss. The New York Stock Exchange is an example of a regulated cash market andthis stock exchange is also a rare example of a market that is safe from automation.

Derivative Markets

The derivative market is called the ‘derivative’ for a reason because its value is acquired based on its underlying asset or assets. Although a derivative is a contract, the contract price is set based on the market price of the core asset. For inexperienced traders seeking to speculate, the derivative market is not ideal due to its complexity but can be used as part of a risk management program protect against the risk of an adverse move.

Forex & Interbank Market

The interbank market is part of the financial system and currency trading performed between banks and financial institutions, not including retail investors and small trading parties. Although some interbank trading is executed between banks on behalf of a large customer, the majority of interbank trading occurs from the banks own account.

The forex market is one of the largest and most liquid markets in the world in terms of the total value traded and exceeds $1.9trillion every day – including all of the currencies in the world today. Although the forex market the largest market in terms of the value traded, any person, firm or county can participate since there is no central marketplace for the exchange of currency to take place. Live Forex trading can be highly beneficial as it allows you to take advantage of the latest updates on the market. However, to succeed at live trading you need to meet certain criteria, including learning how to use the Forex trading software and setting realistic goals before you start.

Primary & Secondary Markets

The primary market is where a majority of investors have their first opportunity to engage in a new security issuance. The funds that are gained from the sale by the issuing company or group is used to fund operations or develop the business where as the secondary market is where investors buy securities or assets from investors as opposed to issuing companies on their own. So essentially, the primary market is the place for new shares and the secondary market is where formerly issued securities must be traded that can be sold multiple times by investors.

The OTC Market

Otherwise called the over-the-counter market, the OTC is a type of secondary market which may be referred to as a dealer market, used to describe stocks that are no longer trading on stock exchange and are usually are traded for companies that don’t fit the criteria to list on a stock exchange. Although OTC market involves trading of financial instruments including stocks, commodities and currencies, it is performed directly between two parties without administration of an exchange.

Third & Fourth Markets

Third and fourth markets usually don’t involve individual investors since they require a significant amount of shares to be negotiated per trade. Instead, the third and further market operates with transactions decided between broker dealers and large institutions through OTC electronic networks. Whilst the third market incorporates OTC transactions between the two, the fourth market is only made up of transactions made between large institutions to avoid placing orders through the main exchange platforms which could significantly increase the cost of the security. The trades carried out by the third and fourth markets will have little, if any effect, on the average investor since both markets are equally as limited.

The purpose of financial institutions and financial markets is to help firms make money by either taking out a loan from and bank and repaying it over a period of time with interest, issue bonds to borrow money from investors to be repaid at specific interest rate or by offering investors part ownership in the company for a claim on its residual cash flow in stock.